Money management: Selling a practice

Whether you are buying or selling an accountancy practice, you need to know all the facts, in particular the financial facts. While ethos, staff, assets, premises and location all play their part in a transaction, without the financial information, most sales will flounder.

Accountants are very adept at managing other people’s financial affairs but you would be surprised how often I come across firms that have neglected their own. Money management is crucial to the success of any sale. Without your own figures at your finger tips, there will be no deal. Buyers need to know exactly what they are buying.

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Replies

Anyone thinking of selling near me postcode GU14 7LY...let me know as we have the premises and staff resources to take over the client base smoothly and a large pile of cash in our bank account that we dont know what to do with as interest rates are so low...

How to do get the same results at a much lower costTom, I don’t own a practice anymore, so I can’t directly help with your request. But I can give you some key thoughts based on the experiences of hundreds of accountants that I work with:Finding good targets is often very hardDoing a deal is often very time consumingConsolidating and bedding in what you buy can be a huge distraction As a result in my experience it is often far more rewarding (and far less costly) to look closer to home. In other words, to spend your energy focusing on developing what you have already got so that:You do much more work for, and make much more money from, your existing clients – so that the quality and profitability of your fee base growsYour existing contacts give you many more referrals of the type you really want - so that the quality and profitability of your client base also grows

No doubt you have done a lot in this area already.

But to help you do even more, I would be delighted to send you a set of nine case studies from 2009/10 revealing how 8 other practices like yours have achieved so much more than they dared to believe was possible. They cover everything from Tax Credit Planning to Virtual FD services, and seminars to tax planning.

Money management is crucial to the success of any sale. I agree with this if you are in business venture financial management does matter, you need to know what it takes to finance or invest in a certain undertaking. Even in personal finances proper handling of money can be a great advantage. There's more than one way to pay for college – if you can float it with wages, that's cool, but most people need a little more, and tuition and books usually cost more than payday loans do. Credit cards are a hard bargain as well, though some have reward points for education purchases. There are always student loans and state aid, and parents can also establish 529 plans or Coverdell Education Savings Plans, AKA the Education IRA. Some employers offer matching plans for 529 savings for parents, and there are also tax breaks for parents who establish 529 accounts.

Steve is absolutely right, there are many ways to add value to your clients and therefore to your practice and underlying lifestyle...Our firm certainly hasn't looked back since meeting Steve and joining AVN.

However, at Croucher Needham we are actually choosing to roll both approaches. We are a fast growing and aquisitive advisory group with very strong interest in speaking with London firms (£1m-£3m) wishing to find a friendly and flexible exit. We are in the market to acquire and do deals!

If you would like to initiate a call or meeting please contact me on 0207 268 3227.

In my experience firms that want to buy fees are usually looking to increase their turnover quickly even though they may very well be growing organically. We have many buyers on our books that have money in the bank. A vendor needs to be careful who they sell to. Most want a clone of themselves but 20 or 30 years younger. No-one sells to someone they do not like. So the first question to ask before looking at the income multiple offered is do you like them? If the answer is no - there is no sale.